Nn Studies Real-estate Tax Matters

NEWPORT NEWS — An upcoming meeting stems partly from citizens' proposal to tie the taxes to a cost-of-living index.

City Manager Randy Hildebrandt is calling for a rare morning meeting next month to discuss with the Newport News City Council a few money matters, including maybe capping real estate taxes.

After a handful of Hilton area residents earlier this month proposed tying real estate taxes to a cost-of- living guide like the Consumer Price Index, Hildebrandt formed a group of top-level staffers to analyze the plan's potential impact on the city's budget.

Their findings -- while eagerly anticipated by Newport News residents who have grumbled over sharp real estate re-assessment spikes in recent years -- will likely not include a recommendation on the cap idea next month.

Hildebrandt said city staffers need to figure out if the city can survive on less real estate tax money without under-funding programs and services.

"My job is to give council a good understanding of what's happening, what the implications of a cap would be," he said. "A group of citizens is beginning to organize, saying we need to control real estate revenue, and I want the council to be able to look long term."

In recent years, real estate re-assessments have soared throughout Hampton Roads, rising as high as 40 percent or more per year in some areas.

Those spikes in Newport News and other local cities and counties have resulted in tax rate cuts and plenty of hard feelings toward local elected officials by homeowners, whose taxes have gone up despite the rate cuts.

Hampton created a formula this year that limits real estate tax collection to increases in the Consumer Price Index, a cost-of-living measurement based on prices of certain goods and services in a region.

This year, real estate re-assessments in Newport News rose an average of 21 percent.

The City Council has cut 7 cents from the real estate tax rate over the past two years, but most homeowners are paying more in real estate taxes because of rising re-assessments.

The average property in Newport News is assessed at $163,000, meaning the homeowner will pay $1,956 annually in taxes on a tax rate of $1.20 for every $100 of assessed value.

Hildebrandt said homeowners should not expect further real estate tax rate cuts because the city faces rising costs for public transportation, jail costs and paying down the debt, among other needs.

The upcoming meeting is slated for 10 a.m. Tuesday, Sept. 26 in the James Room at City Center, pending council members' approval. There will be no public comment period at the meeting.

Although city staffers are not expected to suggest a real estate cap, they will make recommendations about how to handle the city's debt and capital projects.

City officials must finish their plan for financing large-scale city projects for the next fiscal year by Nov. 1.

Hildebrandt's push for the meeting pleases the group of citizens that presented the plan earlier this month. Not only should it enlighten council members, but other residents may understand the problem better, they said.

"It makes me feel very confident about the City Council," said Cary Nunnally, who lives in the Hilton area.

"I'm nervous that people don't get what we're trying to do, which is change the system and not just lower our taxes." *